Some people rent in retirement because they don’t have much choice; they can’t afford to own homes. But financial planners say renting can make more sense than owning in some circumstances.

Renting offers flexibility as well as freedom from all the chores and expenses of maintaining a home.

Renting also may provide built-in communities for socializing, as well as accessible housing features such as one-floor living, which can help people age in place.

People who are “house rich and cash poor” can sell their homes and use the equity to fund a more comfortable lifestyle.

“While retirees often don’t want to rent, it can be a smarter decision for a number of reasons,” says certified financial planner Lisa A.K. Kirchenbauer of Arlington, Va.

In transition

If you’re moving to a new area, financial planners often recommend renting first to get a better feel for the advantages and disadvantages of various neighborhoods.

You’ll need time to find new doctors, check out entertainment venues, try and locate favorite restaurants and otherwise set up your support services, says Delia Fernandez, a certified financial planner in Los Alamitos, Calif.

Renting is often smart if you expect to move again within a few years. Buying and selling homes is expensive, and it also may take longer than you expect.

Aging more safely

Few homes are truly accessible to people who have mobility problems or other age-related disabilities, and adapting your current house could be prohibitively expensive. Newer apartment buildings could offer ramps, elevators, one-floor living and other amenities to keep you safe as you age.

Social isolation and loneliness are other issues to consider, since these can have a huge impact on older people’s health, according to the Centers for Disease Control and Prevention. Apartments can provide a community of people who can socialize and watch out for each other. Rental communities for older adults often offer organized activities to help people connect, says Sara DeSantis, a personal finance educator in Denver.

Another option, for those who can afford it, is a continuing care retirement community that allows you to stay in one place even if you later need higher levels of care. People typically move into one of these facilities when they’re healthy and can live independently, with the promise that they can access assisted living, skilled nursing and sometimes memory care services as they age. These communities typically charge a hefty one-time entrance fee — the average was $379,606 at the end of 2022, according to the National Investment Center for Seniors Housing & Care, a research group. Residents also pay monthly fees that typically increase with the level of care. The average monthly rent was $4,364, NIC found.

Tap more equity

Many people hit retirement age without enough savings and need to use their home equity to supplement their income, says certified financial planner Nicholas Bunio of Berwyn, Pa. But selling a home and buying a less expensive one, or using a reverse mortgage, might not free up enough cash to substantially improve their situations, Bunio notes.

“If you sell the house and rent, you have this big pile of cash to help cover the rent plus anything extra,” Bunio says.

Coping with rent jumps

Many retirees understandably fear the possibility of big rent increases when they’re on a fixed income. But even when you have a fixed-rate mortgage, chances are good that your property taxes, homeowners insurance and costs to maintain and repair your property increase every year as well, says Crystal Cox , a certified financial planner in Madison, Wis.

Renters can ameliorate the risk of rent increases somewhat by opting for longer leases, Bunio says. So-called “mom and pop” landlords may be more amenable to negotiating rent than large corporations, and being a star tenant also can help, Fernandez notes.

“Landlords like people who keep up their property, and they like people who make any maintenance easy,” Fernandez says.

A potential worry is the possibility of eviction. But homeowners aren’t immune to dislocations, DeSantis notes. Many older people move into assisted living facilities because they’re no longer safe in their homes. She recommends considering such a move while still healthy enough to manage the transition.

“Make that decision earlier, instead of it being forced upon you,” DeSantis says.